Law and Finance in Africa

Simplice Asongu

Brussels Economic Review, 2012, vol. 55, issue 4, 385-408

Abstract: ABSTRACT :This paper assesses how legal origin influences financial development through regulationquality and the rule of law. It employs all the dimensions identified by the FinancialDevelopment and Structure Database of the World Bank. The law channels are instrumentedwith legal origins to account for financial intermediary dynamics of depth, efficiency, activityand size. The results broadly support the benefits of law mechanisms in financial development.The findings only show partial support for the consensus that English common law countriesprovide better conditions for financial development. While they dominate in dynamics of depth,activity and size, French civil law countries have an edge in financial allocation efficiency.Portuguese civil law countries broadly fall in-between. With the exception of financialefficiency, French civil law sub-Saharan African (SSA) countries are least while North Africancountries dominate even English common law countries in financial intermediary aspects ofdepth and activity. French SSA countries dominate overall in allocation efficiency.

Keywords: Law; Finance; Banks; Africa (search for similar items in EconPapers)
JEL-codes: G20 K20 K40 O10 P50 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (118)

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Related works:
Working Paper: Law and Finance in Africa (2011)
Working Paper: Law and finance in Africa (2011)
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